Last
summer,
when
Judge
Amit
Mehta
ruled
that
Google
had
violated
antitrust
laws
through
its
search
distribution
agreements,
I
was
left
wondering what
the
hell
any
reasonable
remedy
would
look
like.
The
case
always
struck
me
as
weird—Google
was paying billions
to
Apple
and
Mozilla
to
be
the
default
search
engine
because
users
actually
wanted
Google
as
the
default.
Any
remedy
seemed
likely
to
either
do
nothing
useful
or
actively
harm
the
very
competitors
it
was
supposed
to
help.
Well,
Mehta just
dropped
his
remedial
ruling,
and
honestly?
It’s
more
reasonable
than
I
expected,
though
still
messy
in
predictable
ways.
The
Big
Picture:
No
Chrome
Breakup
Or
Android
Sell
Off,
But
Real
Constraints
The
DOJ
had
pushed
for
some
truly
bonkers
structural
remedies,
including
forcing
Google
to
sell
off
Chrome
or
Android.
Mehta
wasn’t
having
it:
will
not
be
required
to
divest
Chrome;
nor
will
the
court
include
a
contingent
divestiture
of
the
Android
operating
system
in
the
final
judgment.
Plaintiffs
overreached
in
seeking
forced
divesture
of
these
key
assets,
which
did
not
use
to
effect
any
illegal
restraints.
This
makes
sense.
As
discussed
before,
under
antitrust
law,
structural
breakups
should
relate
to
the
actual
violation.
The
problem
wasn’t
Chrome
or
Android—it
was
the
exclusive
deals
that
locked
up
search
distribution.
Breaking
up
unrelated
business
units
would
be
pure
punishment
without
purpose
and
could
(again)
do
more
damage
to
competitors
than
to
Google
itself.
The
Exclusive
Deals
Ban:
Logical
But
Concerning
The
core
remedy
targets
the
actual
problem—Google’s
exclusive
distribution
agreements:
will
be
barred
from
entering
or
maintaining
any
exclusive
contract
relating
to
the
distribution
of
Search,
Chrome,
Assistant,
and
the
Gemini
app.
This
tracks
the
violation,
which
is
good.
But
here’s
where
it
gets
tricky.
The
ruling
also
says:
Google will
not
be
barred from
making
payments
or
offering
other
consideration
to
distribution
partners
for
preloading
or
placement
of
Search,
Chrome,
or
its
GenAI
products.
So
Google
can
still
pay
Apple
and
Mozilla,
just
not
exclusively?
That
seems
like
a
distinction
that
might
not
make
much
practical
difference.
If
Google
can
outbid
everyone
else
(which
they
can),
and
Apple/Mozilla
have
admitted
users
get
pissed
when
they
don’t
use
Google
as
default,
what
exactly
changes
here?
The
court
was
clearly
aware
of
this
problem.
In
fact,
Mehta’s
analysis
of
the
downstream
effects
reads
like
a
catalog
of
unintended
consequences
that
would
make
any
antitrust
reformer
wince:
The
complete
loss
or
reduction
of
payments
to
distributors
is
likely
to
have
significant
downstream
effects
on
multiple
fronts,
some
possibly
dire.
They
could
include:
Lost
competition
and
innovation
from
small
developers
in
the
browser
market.
…
(stating
that
for
Opera
the
loss
of
payments
from
“would
make
it
hard
for
[it]
to
continue
to
invest
in
innovative
solutions
that
[it]
provide[s]
for
the
US
audience”).
Mozilla,
in
particular,
fears
that
lower
revenue
share
payments
could
“potentially
start
a
downward
spiral
of
usage
as
people
defected
from
our
browser,
which
.
.
.
could
at
the
end
of
the
day
put
Firefox
out
of
business.”
…
(“Mozilla
has
repeatedly
made
clear
that
without
these
[revenue
share]
payments,
it
would
not
be
able
to
function
as
it
does
today.”).
Fewer
products
and
less
product
innovation
from
Apple.
…
(Cue)
(stating
that
the
loss
of
revenue
share
would
“impact
[Apple’s]
ability
at
creating
new
products
and
new
capabilities
into
the
[operating
system]
itself”).
The
loss
of
revenue
share
“just
lets
[Apple]
do
less.”…
Less
investment
in
the
U.S.
market
by
Android
OEMs,
which
would
reduce
competition
in
the
U.S.
mobile
phone
market
with
Apple.
…(“[I]f
[Samsung
is]
not
getting
paid
from
in
the
revenue
share
that
[it’s]
currently
getting,
I
think
it
will
probably
make
[Samsung’s]
position
much
weaker
to
innovate
and
provide
.
.
.
the
latest
technology
and
better
services
to
our
customer.
.
.
.
[W]e
might
face
.
.
.
a
very
difficult
situation
to
continue
our
business.”);
…
(“If
[Motorola]
were
not
to
receive
[revenue
share
payments],
it
would
have
significant
financial
burdens
on
[its]
business.
.
.
.
[A]dvanced
resources
in
North
America
.
.
.
would
be
put
at
risk
if
[it]
were
to
lose
this
funding.”);
…
(“It
is
much
more
costly
for
[Verizon]
to
promote
an
[Apple]
device
than
an
Android
device
.
.
.
.
So
the
more
the
Android
ecosystem
loses
share
in
the
Verizon
customer
base,
the
more
costly
it
is
for
Verizon,
and
that
weighs
on
our
[profit
and
loss].”).
Higher
mobile
phone
prices
and
less
innovative
phone
features.
…
(“[S]ome
of
[Samsung]
product[s]
could
end
up
increasing
prices
or
defeature
our
product[s]
to
manage
the
profit,
which
will
make
our
position
very
weaker
in
the
market
and
especially
in
U.S.”);
…
(“[O]ne
of
the
ways
[AT&T]
can
help
offset
some
of
the
cost
of
th[e]
device
subsidy
and
make
the
devices
more
affordable
to
consumers
is
to
have
the
ability
to
seek
distribution
or
revenue
share
agreements
with
search,
but
also
other
services.”);
…
(“[T]hose
restrictions
would
prevent
from
entering
into
agreements
similar
to
what
[T-Mobile]
ha[s]
with
the
Android
Activation
Agreement,
.
.
.
the
revenues
from
which
[it]
use[s]
to
help
prop
up
the
Android
ecosystem
through
subsidies
.
.
.
et
cetera.”);
…
(stating
that
Verizon’s
RSA
with
“help[s]
and
fund[s]
the
promotion
of
devices
and
offset[s]”
billions
in
subsidies).
The
court
cannot
predict
to
any
degree
of
certainty
that
one
or
more
of
these
effects
will
in
fact
occur.
But
the
risk
is
far
from
small,
which
is
reason
enough
not
to
proceed
with
the
remedy.
Think
about
the
weird
logic
here:
Google’s
current
payment
structure
has
created
an
ecosystem
where
cutting
off
those
payments
would
likely
kill
Firefox
(a
key
browser
competitor),
leave
Samsung
and
other
Android
manufacturers
financially
weakened
against
Apple,
and
potentially
raise
phone
prices
for
consumers.
Meanwhile,
Google
would
save
billions
in
payments
and
still
likely
retain
most
users
anyway.
In
such
a
scenario,
keeping
the
money
flowing
is
actually
essential
to
greater
competition.
Data
Sharing:
The
Actually
Interesting
Bit
But
here’s
where
Mehta
may
have
found
the
real
lever
for
change.
Google
will
have
to
share
search
index
and
user
interaction
data
with
“Qualified
Competitors”:
will
have
to
make
available
to
Qualified
Competitors
certain
search
index
and
user-interaction
data,
though
not
ads
data,
as
such
sharing
will
deny
the
fruits
of
its
exclusionary
acts
and
promote
competition.
This
could
be
genuinely
transformative,
but
there
are
lots
of
questions
about
how
it
will
actually
work
in
practice.
The
biggest
barrier
to
competing
with
Google
isn’t
just
the
exclusive
deals—it’s
the
chicken-and-egg
problem
of
needing
massive
scale
to
build
a
decent
search
index,
but
needing
a
decent
search
index
to
attract
users
that
create
scale.
Google’s
search
index
represents
decades
of
crawling,
indexing,
and
learning
from
user
interactions
across
billions
of
queries.
No
startup
can
replicate
that
from
scratch.
As
DuckDuckGo
noted
in
their
remedies
proposal,
access
to
Google’s
search
results
via
API could
actually
level
the
playing
field in
ways
that
breaking
up
Chrome
or
Android
never
could
(though
DuckDuckGo
has
said
that
this
remedy
ruling
is
insufficient
in
its
eyes).
A
competitor
could
potentially
build
a
differentiated
search
experience—better
privacy,
different
ranking
algorithms,
specialized
vertical
search—while
leveraging
Google’s
underlying
index
as
a
foundation.
The
court
was
careful
to
limit
this:
The
court,
however,
has
narrowed
the
datasets
will
be
required
to
share
to
tailor
the
remedy
to
its
anticompetitive
conduct.
The
key
word
here
is
“narrowed.”
Mehta
isn’t
requiring
Google
to
hand
over
everything—which
would
raise
legitimate
privacy
and
security
concerns—but
specifically
the
datasets
that
flow
from
the
scale
advantages
Google
gained
through
its
anticompetitive
conduct.
It’s
an
elegant
solution
that
addresses
the
actual
harm
without
creating
new
ones.
Google
will
also
have
to
offer
search
and
ads
syndication
services
to
qualified
competitors:
shall
offer
Qualified
Competitors
search
and
search
text
ads
syndication
services
to
enable
those
firms
to
deliver
high-quality
search
results
and
ads
to
compete
with
while
they
develop
their
own
search
technologies
and
capacity.
Such
syndication,
however,
shall
occur
largely
on
ordinary
commercial
terms
that
are
consistent
with
Google’s
current
syndication
services.
Think
of
this
as
mandated
training
wheels
for
search
competitors.
Google
has
to
help
rivals
build
their
own
search
capacity
using
Google’s
infrastructure,
but
only
until
they
can
develop
their
own.
The
“ordinary
commercial
terms”
language
is
crucial—it
prevents
Google
from
pricing
competitors
out
while
ensuring
the
remedy
doesn’t
become
a
permanent
subsidy.
The
AI
Wrinkle
What’s
fascinating
is
how
much
generative
AI
looms
over
this
entire
ruling.
As
Mehta
notes
(GSEs
is
“general
search
engines”):
The
emergence
of
GenAI
changed
the
course
of
this
case.
No
witness
at
the
liability
trial
testified
that
GenAI
products
posed
a
near-term
threat
to
GSEs.
The
very
first
witness
at
the
remedies
hearing,
by
contrast,
placed
GenAI
front
and
center
as
a
nascent
competitive
threat.
These
remedies
proceedings
thus
have
been
as
much
about
promoting
competition
among
GSEs
as
ensuring
that
Google’s
dominance
in
search
does
not
carry
over
into
the
GenAI
space.
Many
of
Plaintiffs’
proposed
remedies
are
crafted
with
that
latter
objective
in
mind.
This
timing
accident
may
have
saved
the
case
from
irrelevance.
When
the
DOJ
first
filed
this
lawsuit,
Google’s
search
dominance
seemed
unshakeable.
By
the
time
Mehta
was
crafting
remedies,
generative
AI
had
created
the
first
credible
alternative
to
traditional
search
in
decades.
Suddenly,
preventing
Google
from
extending
its
search
monopoly
into
AI
distribution
became
just
as
important
as
addressing
its
existing
dominance.
Dozens
of
pages
are
devoted
to
the
rise
of
LLM
technology,
as
well
as
chatbots
and
agents.
While
it
notes
the
limits
of
comparing
Generative
AI
tech
to
search,
it
also
notes
how
competitive
the
market
is:
The
GenAI
space
is
highly
competitive.
See
id.
at
503:25–504:4
(Turley)
(Q.
And
let’s
talk
about
the
[GenAI]
space
.
.
.
.
You
consider
that
space
to
be
very
competitive;
correct?
A.
Yes,
absolutely.”);
id.
at
3335:19-23
(Collins)
(“[Q.]
How
would
you
describe
the
current
level
of
competition
with
respect
to
foundation
models
as
compared
to
the
course
of
competition
over
the
years
that
you’ve
seen?
A.
[It]
is
the
most
competitive
market
I’ve
ever
worked
in.”);
id.
at
685:4-8
(Hsiao)
(“Q.
How
would
you
describe
the
competitive
space
that
the
Gemini
app
occupies?
A.
I
would
say
I
don’t
think
I’ve
seen
a
more
fierce
competition
ever
in
my
20-some
years
of
working
in
technology.”).
There
have
been
numerous
new
market
entrants.
See
id.
at
685:9-13
(Hsiao)
(“It’s
explosive
growth.
There’s
new
entrants.
.
.
.
You
know,
Grok,
DeepSeek,
all
sort
of
new
emerging
models
that
are
really,
really
strong.”
….
(Hitt)
(“You
see
entrants
like
Grok
or
DeepSeek,
that
may
not
have
existed
six
months
ago,
are
now
able
to
reach
the
level
of
performance
to
wind
up
in
the
top
ten
of
these
models.”);
id.
at
2459:21-23
(Pichai)
(“You
have
seen
over
the
last
few
months
as
many
people
have
launched
chatbots.
Very
quickly,
these
chatbots
reach
tens
of
millions
of
users.”).
Again,
the
ruling
makes
it
clear
that
Generative
AI
tools
and
search
aren’t
exactly
direct
competitors
yet,
but
there
are
signs
of
the
market
heading
that
way:
GenAI
products
may
be
having
some
impact
on
GSE
usage.
…
(Cue)
(testifying
that
the
volume
of
Search
queries
in
Apple’s
Safari
web
browser
declined
for
the
first
time
in
22
years
perhaps
due
to
the
emergence
of
GenAI
chatbots).
But
GenAI
products
have
not
eliminated
the
need
for
GSEs.
…
(“ChatGPT
already
expanded
what
is
possible
for
parts
of
Search,
but
users
don’t
yet
use
ChatGPT
for
the
full
range
of
Search
needs.”);
…
(Hsiao)
(testifying
that
tracks
so-called
“cannibalization”
of
Search
by
GenAI
chatbots
and
the
Gemini
app
is
not
diverting
queries
from
Search
to
a
significant
degree
today);
…
(Cue)
(attributing
the
recent
decline
in
Safari’s
search
volume
to
increasing
usage
of
GenAI
apps
but
recognizing
these
apps
must
improve
to
compete
with
Search);
…
(Opening
Arg.)
(Plaintiffs’
counsel
acknowledging
that
general
search
and
GenAI
“are
different
but
overlapping
products”
and
that
GenAI
“is
not
a
replacement
for
[s]earch
today);
Again,
it
seems
like
Judge
Mehta
is
properly
trying
to
respond
to
the
actual
violations
here
and
trying
to
make
sure
any
remedies
match
that,
without
getting
in
the
way
of
actual
market
forces
at
work.
Some
Judicial
Humility
Is
Nice
To
See
Throughout
the
ruling,
Mehta
acknowledges
the
fundamental
challenge
of
antitrust
remedies:
Notwithstanding
this
power,
courts
must
approach
the
task
of
crafting
remedies
with
a
healthy
dose
of
humility.
This
court
has
done
so.
It
has
no
expertise
in
the
business
of
GSEs,
the
buying
and
selling
of
search
text
ads,
or
the
engineering
of
GenAI
technologies.
And,
unlike
the
typical
case
where
the
court’s
job
is
to
resolve
a
dispute
based
on
historic
facts,
here
the
court
is
asked
to
gaze
into
a
crystal
ball
and
look
to
the
future.
Not
exactly
a
judge’s
forte.
This
is
refreshingly
honest.
Courts
suck
at
designing
technology
markets.
The
best
they
can
do
is
try
to
remove
barriers
and
let
competition
happen,
rather
than
micromanage
outcomes.
Still
A
Long
Road
Ahead
Of
course,
none
of
this
matters
immediately.
Google
will
likely
appeal
(though,
honestly,
the
result
here
might
be
worth
not
having
to
spend
on
an
appeal
and
the
uncertainty
it
would
bring),
and
we’re
looking
at
years
more
litigation
before
anything
actually
happens.
By
then,
the
entire
search
landscape
might
have
been
transformed
by
AI
anyway.
But
if
this
ruling
does
eventually
stick,
it’s
not
the
disaster
I
feared
it
might
be.
It
targets
the
actual
problem
(exclusive
distribution
deals),
creates
some
potentially
useful
competitive
tools
(data
sharing
and
syndication
with
proper
limitations
for
privacy
reasons),
and
avoids
the
worst
structural
remedies
that
would
have
helped
no
one.
The
question
remains
whether
any
of
this
will
actually
create
more
competitive
search
engines.
But
at
least
it’s
not
actively
making
things
worse,
which,
honestly,
was
my
biggest
fear
going
in.
I
had
feared
that
the
court
wouldn’t
properly
thread
the
needle
on
remedies,
and
yet…
this
seems
to
have
been
done
very
thoughtfully
and
strikes
what
is
likely
a
good
balance.
Judge
Mehta’s
Google
Antitrust
Remedies:
Threading
The
Needle
Between
Overkill
And
Underkill
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